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The influx of parallel traders who buy their stock tax-free in Hong Kong to resell it in mainland China at a profit is causing growing unrest. Residents of Sheung Shui, a town close to China's border, say the increase in parallel importers has pushed up retail prices and causes a general nuisance. Importers argue that their trade benefits the Hong Kong economy.

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CUSTOMS

Exco to debate two-tin milk law

Special meeting believed to be on agenda today to change import-export laws and put the squeeze on parallel-goods traders

A special Executive Council meeting will be held today to discuss amending import and export laws to tackle the problem of parallel-goods trading, a source said last night.

The changes -proposed by the Food and Health Bureau this month - would mean people aged 16 and over cannot leave the city with more than a total weight of 1.8kg, or two tins of infant formula, in their usual packaging, in any one day.

Anyone breaking this law could be fined up to HK$500,000 and jailed for up to two years. Although the source did not say when the law was expected to come into practice, the bureau has said that it intends to implement the new provisions as soon as possible.

If approved by Exco, they will still need to go before the Legislative Council before the changes can take effect.

Leung Kim-shing, spokesman of the North District Parallel Imports Concern Group, said the progress was too slow.

"At present, there are still shortages of baby formula in districts such as Tsing Yi and Kwun Tong. This (submission to Exco) has come too late," Leung said.

He suggested that the government should also limit how much baby formula could be bought at pharmacies and supermarkets to prevent the parallel traders stockpiling formula on this side of the border.

He also wanted to see the government taking action to trace the person at the top of parallel-goods trading gangs. "In many cases, the formula belongs to a mastermind who pays other people to carry the formula for them," he said.

North District councillor Lau Kwok-fan, on the other hand, felt the government had been decisive and the progress swift. It included a public consultation period from February 7 to 18.

"Amending the law is something that needs to be done carefully," he said. He also believed the punishment would be severe enough to deter parallel-goods traders from breaking the law.

He visited the Sheung Shui MTR station near the border with the mainland yesterday, where parallel traders usually gather to take the train to Shenzhen. But Lau said he only saw a few of the traders. He believes many are taking an extended Lunar New Year holiday and will return to business on Sunday.

To tackle the shortage of baby formula, the government has already set up a 24-hour hotline for Hong Kong parents to place orders, and the MTR has lowered the maximum baggage limit on the East Rail Line from 32kg to 23kg.

The Shenzhen authorities have also acted to stop frequent travellers to Hong Kong from bringing anything back across the border besides essential personal items. Regular travellers can bring back HK$5,000 worth of goods only once every 15 days.

This article appeared in the South China Morning Post print edition as Exco to Debate two-tinMilk law